Knowledge Bank

The China-Pakistan Economic Corridor (CPEC), part of the People’s Republic of China’s Belt and Road initiative, is a collection of infrastructure, energy, and technology projects currently being constructed throughout The Islamic Republic of Pakistan and the western Xinjiang region of China. CPEC, coined as a “game changer” by Pakistani officials, is the most recent manifestation of a burgeoning relationship between China and Pakistan. China is financing the projects through a network of zero-interest loans, grants, and low-interest loans to the Pakistani government with a total planned investment of 45 billion USD. The main goal of CPEC is increased economic connectivity and stabilization throughout Pakistan. The purpose of this paper is three fold: to study the economic impact of the China-Pakistan Economic Corridor (CPEC) on the Islamic Republic, to determine what China hopes to achieve in Pakistan/CPEC, and finally to examine if and how the United States with its strategic interests and close, complicated history with Pakistan, will (or can) maintain its influence in Pakistan if Pakistan is transformed. I will argue that the Chinese economic development strategy behind CPEC will actual do more to address the fundamental deficiencies of the Pakistani economy than the military focused (and economic-lacking) aid strategy of the United States. In this paper I am going to discuss the China-Pakistani Economic corridor, what exactly the cooperation entails in terms of physical infrastructure, economic stimulus, the background of the relations between China and Pakistan. Then I will address the issues Pakistan is facing, specifically the lopsided aid, lack of state functionality, and dismal economic development.